Profitability
Earnings Per Share (EPS)
EPS is the profit attributed to each share, the denominator's partner in the P/E ratio.
Earnings per share turns a company-level profit into a per-share figure so it can be set next to the price. Diluted EPS counts shares that could be issued from options and convertibles, which is the conservative number and the one valuation should use. Basic EPS ignores that dilution and looks kinder.
EPS grows for two reasons: the business earns more, or the share count shrinks. Buybacks can lift EPS while total profit stands still. Read EPS growth beside net income growth. If per-share earnings sprint and total earnings walk, the capital-return policy is doing a lot of the work.
Formula
EPS = net income available to common shareholders ÷ diluted shares outstanding
Live example
Apple Inc. (AAPL) last printed at $345.33 with a market cap of $5.04T. Apply the formula on this page to that live price. Where the quote is missing an input, the stock page's financials are the next place to read it.
Related
P/E Ratio · Shares Outstanding · Share Buyback
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Questions
Why do EPS and 'earnings' disagree?
Headlines often quote adjusted EPS, which excludes items management calls one-off. GAAP EPS includes them. Know which one is in the P/E.
What is forward EPS?
The consensus estimate of EPS over a coming period. It is an input to forward P/E and to many price targets, and it will be revised.